Service Cooperation Incentive Mechanism in a Dual-Channel Supply Chain under Service Differentiation


The co-principal-anent models of manufacturer and retailer are built under the complete information and asymmetric information. In addition, the optimal profit sharing and the optimal fixed payment ratio are analyzed and compared in both situations. A motivate mechanism about service effort provided by the manufacturer towards the retailer in a dual-channel supply chain is studied. It implies that the profit of manufacturer under asymmetric information decreases dramatically contrasted to complete information and the retailer can gain profits by providing lower services, thus refusing deficiency of the supply chain.

Share and Cite:

Yang, Q. and Zhang, M. (2015) Service Cooperation Incentive Mechanism in a Dual-Channel Supply Chain under Service Differentiation. American Journal of Industrial and Business Management, 5, 226-234. doi: 10.4236/ajibm.2015.54025.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Liu, S.J. (2002) The Factors and Develop Ideas of Personnel Leasing. Human Resources, 4, 18-20.
[2] Yao, D.Q., Yue, X.H. and Wang, X.Y. (2005) The Impact of Information Sharing on a Returns Policy with the Addition of a Direct Channel. International Journal of Production Economics, 97, 196-209.
[3] Kurata, H., Yao, D.Q. and Liu, J.J. (2007) Pricing Polices under Direct vs. in Direct Channel Competition and National vs. Store Brand Competition. European Journal of Operation Research, 180, 262-281.
[4] Cai, G., Zhang, Z.G. and Zhang, M. (2009) Game Theoretical Perspectives on Dual Channel Supply Chain Competition with Price Discounts and Pricing Schemes. International Journal of Production Economics, 117, 80-96.
[5] Chen, S.Z., Xiong, Z.K. and Liang, X. (2009) Contract Design for a Dual-Channel Supply Chain Coordination with Incentive Compensation. Chinese Journal of Management Science, 17, 64-75.
[6] Chiang, W.K., Chhajed, D. and Hess, J.D. (2003) Direct Marketing, Indirect Profits: A Strategic Analysis of Dual- Channel Supply-Chain Design. Management Science, 49, 1-20.
[7] Rohm, A.J. and Swaminathan, V. (2004) A Typology of Online Shoppers Based on shopping Motivations. Journal of Business Research, 57, 748-757.
[8] Yao, D.Q. and Liu, J.J. (2005) Competitive Pricing of Mixed Retail and Etail Distribution Channels. Omega, 33, 235-247.
[9] Xu, M.H., Yu, G. and Zhang, H.Q. (2006) Game Analysis in a Supply Chain with Service Provision. Journal of Management Science in China, 9, 18-27.
[10] Mukhopadhyay, S.K., Yao, D.Q. and Yue, X. (2008) Information Sharing of Value-Adding Retailer in a Mixed Channel Hi-Tech Supply Chain. Journal of Business Research, 61, 950-958.
[11] Chen, K.Y., Kaya, M. and Özalp, Ö. (2008) Dual Sales Channel Management with Service Competition. Manufacturing & Service Operations Management, 10, 654-675.
[12] Chen, Y.G. and Liu, N. (2010) Dual-Channel Supply Chain Competition Strategy with Service Differentiation. Computer Integrated Manufacturing Systems, 16, 2484-2488.
[13] Sun, Y.H., Tu, Y.J. and Xu, X.Y. (2011) The Service Competition Model Based on Customer Channel Preference. Journal of Management Science, 24, 62-70.
[14] Luo, M.L., Li, G. and Sun, L.Y. (2011) Competition in a Dual-Channel Supply Chain with Add-Value Services. Industrial Engineering and Management, 16, 37-44.
[15] Dan, B., Xu, G.Y. and Liu, C. (2012) Pricing Policies in a Dual-Channel Supply Chain with Retail Services. Production Economics, 139, 312-320.
[16] Xiao, J., Dan, B. and Zhang, X.M. (2010) Service Cooperation Pricing Strategy between Manufacturers and Retailers in Dual-Channel Supply Chain. Systems Engineering-Theory & Practice, 30, 2203-2211.
[17] Luo, M.L., Li, G. and Sun, L.Y. (2011) Competition in a Dual Channel Supply Chain with Service Spill-Over Effect. Journal of Systems & Management, 20, 648-657.
[18] Kong, Q.H., Xing, W. and Shi, X.M. (2012) On Problem of Dual-Channel Supply Chain Pricing with Service Strategy. Commercial Research, 418, 114-118.
[19] Laffont, J.J. and Martimort, D. (2002) The Theory of Incentives: The Principal Agent Model. China Renmin University Press, Beijing.
[20] Zhang, W.Y. (2012) The Game Theory and Information Economy. Shanghai People’s Publishing House, Shanghai, 239-256.
[21] Weitzman, M.L. (1980) Efficient Incentive Contracts. The Quarterly Journal of Economics, 94, 719-730.
[22] Holmstrom, B. and Milgrom, P. (1987) Aggregation and Linearity in the Provision of Intertemporal Incentives. Eco- nometrica, 55, 303-328.

Copyright © 2022 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.